ACC 410 WEEK 3 QUIZ 2
Issues of Budgeting and Control
TRUE/FALSE (CHAPTER 3)
- Capital budgets focus on plans for the acquisition and construction of fixed assets.
- The accounting cycle for most governments is two to three years, consistent with the terms of elected officials.
- Most budgets are prepared on a cash or modified cash basis.
- Neither the GASB nor the FASB sets standards for budgetary accounting.
- State and local governments must prepare their GAAP budgetary comparisons on the modified accrual basis of accounting.
- When budgets are integrated into a government’s accounting system, estimated revenues are debited.
- Encumbrances and expenditures both reduce total fund balances of state and local governments.
- Not-for-profit budgets focus first on revenues and secondarily on expenditures.
- State and local governments’ budget-to-actual comparisons present both original and final budget amounts.
- Cash-basis budgets help governments focus on interperiod equity.
- Reserve for encumbrances accounts should be closed at year-end.
- Capital budgets concentrate on long-lived assets.
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